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Companies looking to build a satisfied and loyal customer base need to realize that there are multiple drivers of customer satisfaction.

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Image courtesy of WE Fashion

Savvy company executives know that some of their greatest and potentially most enduring assets are their long-run customer relationships. Trying to sustain a competitive advantage with new products is a frustrating game, where short-term leads often erode quickly. But by satisfying customers, companies can nurture long-term relationships and customer loyalty. What’s more, a small increase in customer loyalty can make a big difference in company profits. McDonald’s, for example, calculated back in the 1990s that just one additional visit per week by “heavy users” would boost annual sales by more than $10 billion dollars.

Blending Bricks and Clicks

In retailing, customer loyalty cannot be achieved for long by keeping customer interactions online distinct and separate from those offline. Many consumers have largely merged their shopping to the extent that they go back and forth between online and offline retailers. They may start out by looking at desired products in a store, go online to check out the products further, then decide to buy them from an online seller such as Amazon. Or they may start searching online, then go look at the items offline at a Walmart or Target store, and perhaps buy them there because they’re immediately available. Since consumers are fusing their offline and online shopping habits, retailers must adapt their systems as necessary to create seamless “brick-and-click” stores. Shoppers will reward companies that do this well. Many Amazon customers use brick-and-mortar Best Buy, Target or Walmart stores to inspect products before making their final purchases online from Amazon. Consumers treating offline stores as “showrooms” prior to purchasing elsewhere on the Internet present a serious threat to companies that have yet to blend their offline and online stores.

Traditional retailers are fighting back, in part by asking suppliers to provide designs and products that are “exclusive” to their stores. Toys “R” Us, for instance, has many products that can’t be purchased from other stores or websites. Target does likewise with fashion brands such as Missoni and Jason Wu. Retailers need to recognize that technological devices such as smartphones are upping the ante. Apple recognized this early on and developed its own brick-and-mortar stores where potential customers could see, hold and try products before buying them. To attract and retain customers, retailers will need to meet or exceed customer expectations throughout the shopping and buying experience.

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About the Authors

Rolph E. Anderson is Royal H. Gibson Sr. Professor of Marketing at Drexel University’s LeBow College of Business in Philadelphia, Pennsylvania. Srinivasan Swaminathan is a professor of marketing at Drexel University. Rajiv Mehta is a professor of marketing in the School of Management at New Jersey Institute of Technology in Newark, New Jersey.